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Reforms implemented through debt deflation

SAP's. The list of budgetary and policy changes required by the IMF and World Bank in order for a poor countries to qualify for a loan. This “conditionality” typically includes reducing barriers to trade and capital flows, tax increases, and cuts in government spending. Through SAPs, the IMF and World Bank can force poorer countries to prioritize macroeconomic stability over programs for public well-being. The IMF claims that this is important since countries cannot afford to spend as much money as they were spending. The result has been that governments have greatly cut the amount of money they spend on education, health care and other basic social services. The U.N. estimates that six million children a year die because of policies imposed by the IMF and World Bank

is a trade and economic policy based on the premise that a country should attempt to substitute products which it imports, mostly finished goods, with locally produced substitutes.

Industrializing Latin American countries have adopted this policy

I.S.I - Import Substitution-Industrialization

Projection of American Power in Eastern Mediterranean (1947)

- 400M in military and economic aid to Greece and Turkey
- Procalimed U.S. intention to "contain" communism everywhere in the world
- Rhetoric of "supporting free peoples" and democracy, and anticommunism
- Underlying strategy: Easing the dollar drain from most valued U.S. trading partner (GB) and taking over as regional policman in teh Middle East

Attempted solutions to Dollar Gap
"Contain Communism"

Time Magazine

Truman Doctrine (1947)

Internationalist secretary of state, 1930's.

Former senator from Tennessee had supported free trade for years. In 1934, while Sec of State, had congress pass the Hull’s Reciprocal Trade Agreements Act which allowed the President to negotiate tariff reductions up to 50% with other countries

- Supporter of free trade
Negotiated tarrif reductions of up to 50%

Cordell Hull

Chinese farm Communes.

In a few months in 1958 they swiftly organized 99% of the farmers in huge communes.

The results were terrible. The harvest of 1958 was exceptionally good so the damage of the communes was not immediately showed, but the inefficiency of the system caused a great famine in 1960

Great Leap foward

Gold Standard regulatory process.

is a logical mechanism created by David Hume which dispelled the Mercantilist (1700-1776) notion that a nation can have a continuously favorable balance of trade.

Price-Speci Flow Mechanism

Austrian Economist/rival of John Maynard Keynes

Von Hayek

Currency Exchange

- Grew out of EEC

Convertibility

Club of richest nations.

Founded in 1961. Known as the rich world club is an international organisation helping governments tackle the economic, social and governance challenges of a globalised economy.

Organization for Economic Coorporation and Development (OECD)

Engineered and built the Suez Canal

Ferdiand De Lesseps

Income and price collapse

Debt Deflation

U.S. Aviator and isolationist

Charles Lindbergh

Intrafirm trade

Transfer pricing

1890 U.S. Tarriff

Protectionism. Backlash at globalism
Prices were falling

McKinley

Bank created at Bretton Woods (abbr) for short-term lending

International Monetary Fund I.M.F.

Bank created at Bretton Woods (abbr) for long-term lending

World Bank

Autrian Bank that failed in 1931. Opened by Rothschild

Creditanstalt

Developing nations U.N. Lobby

- To counter the economic influence of developed world

Group of 77

U.S. Strategy for rebuilding Japan

Reverse Course

Opium Trader

East India Company

German Chemical Company
- Found substitution for oil
- Won Noble prize in Chemistry

Igfarben

Oil earnings invested in commercial banks

In effect, oil shock resulted in a large transfer of money from U.S. consumers to oil states, oil companies, international banks, and U.S. arms merchant

Oil money

Petrodollars

Supply-side economics

-Cutting taxes and social spending will create investment
- took regulation beyond airline industry to savings and loan

Reagonomics

Nazi economic minister

Hjalmar Schacht

Plan for the Post WWII reconstruction of Western Europe

Economic aid. Attempted solutions to Dollar Gap
- Scaring the hell out of American people allowed Truman Administration to sell Marshall plan
- Shift Europe coal-based to oil-based energy
- 20% of Marshall plan funds used to buy oil supplied by American oil companies from the Middle East

1840 – 1915
He ran the London office of the house of Rothschild. His life encompassed the golden age and he used his influence to to reinforce the three major pillars of the golden age international economy: finance, the gold standard, and free trade

Nathan Mayer Rothschild

Blueprint for U.S. militarization of the Cold War

NSC-68

Global satellite consortium

- Consisting of 19 nations
- Howard Hughes built and placed in orbit

INTELSAT

Treaty that created European currency union

Unification of currencies. Cooporation in things like broad foreign policy

A French brandy salesman was central to one of the Bretton Woods – era development: western europe’s creation of a common market.

- World traveler, and exporter's belief in economic internationalism

Jean Monnet

1928 agreement in Middle East oil supply

Redline

Isolationist and "Mr. Republican"

- Opposed increasing aid or political conflicts abroad

Robert Taft

Saudi Aramco oil company

Aramco

Congress that ended the Neopolonic Wars

Congress of Vienna

Chairman of the U.S Federal Reserve Bank early 1980's

________ shock - 79-82; raised interst rates 20%

Paul Volcker

Powerful chairman of Standard Oil of New Jersey

"The Boss"

Walter Teagle

United Western Europe behind a common external tarrif (abbr).

1958 – common market among countries in Europe. The stepping stone for the European Union, the Euro common currency.

European Economic Community (EEC)

Postulated that trade is not a zero-sum game.

Strongly against mercanilism. Importance of the market.
- The invisible hand
- Law of supply and demand
- Division of labor
- Critisism of mercanilism
- Laissez-faire

"Wealth of Nations"

Adam Smith

Equity shareholding innovation

Limited Liability

British or English economist critical of gold standard

John Maynard Keynes

Small social democrats of Western Europe.

______ Group was an organization of officially neutral countries. Four members later joined the Allies, as governments in exile: the Kingdom of Norway, the Kingdom of the Netherlands, the Kingdom of Belgium and the Grand Duchy of Luxembourg. The Oslo Group in western Europe was pulling for a rebuilt trading order after the war.

During depression in '32. Wanted to rebuild the trading system

Oslo Group

Trade Theory that explained patterns of export specialization

- A country will export goods that make intensive use of the resources it has in abundance. Countries with lots of land will export agricultural products and will import capital intensive industrial products, countries with lots of capital will export capital intensive products and import agricultural products.

A country will export goods that make intensive use of resources that has a lot of

Heckscher-Ohlin Trade Theory

Investment abroad with management control (abbr)

Investment by firm based in one country and actual produce capacity in another country

Foreighn Direct Investment (FDI)

Margaret Thatcher's epitaph for the Cold War

TINA ("There is no alternative") to capitalism

1994 Free Trade Agreement (abbr)

Removed barriers of

Copied Maastrict treaty in Europe

NAFTA

Post WWII global crisis

-Struggling europena and Japanese recovery & U.S. isolationism

Dollar Gap

Principle of Multilateral trade

The 1860 commercial treaty between Britain and France with MFN

Most Favored Nation (MFN)

U.S Agricultual loans
- U.S. provided loans to government around world and used to buy U.S. farm products

"Cargill" largest private company

PL-480

Public Law 480

Laid Trans-Atlantic Telegrpah cable

-Largest steamship
Cyrus Field, he laid the telegraph company

Great Eastern

Private Oil Cartel

Set market and froze prices

A.S-I.S.

Theorists of industrial protection

Friedrich List

U.S tarriff act, 1930

This policy further reduced trade

Smoot-Hawley Tariff Act of 1930

Architect of U.S. Cold War Strategy.
- Truman's under secretary of State (1946-1949)
- Secreary of State (1949-1952)

"Korea came along and saved us"

Dean Acheson

Self contained extractive operations.

Terms refers to colonies where the owners, the customers and the workers had no long term interest in the region and the impact on the local economy was minimal. They extracted whatever resources they could find in self contained enclaves of copper and gold mines or banana and sugar plantations.

Enclaves

Forum for Trade negotiations; precursor to the WTO (abbr)

Regulated Int's trade based on negotiations rules that benefited developed nations

GATT
(General Agreement on Tarrif's and Trade)

Articulated the theory of compartive advantage

Ricardo

Keynesian federal reserve chairman, 1930's.

A Utah's banker of the 1930's who argues for the governemnt to assume major fiscal tasks in a way that later became known as Keynesian.

Under Roosevelt

Mariners Eccles

Labor used in building Suez Canal

Corvee

U.S. Agricultural Loans

PL480

Costs of business placed on outside actors.

A cost or benefit from a business transaction to a third party

Externalities

Cotton Textile innovator

Richard Arkwright

Areas of trade protected by developed nations:

Food and Fiber

Indian Cloth desired in Europe

Chintz

Multinational corporation set up local production unit to locally manufacture their wares for local consumption allowing them to profit from a market without having to import the finished goods subject to import tariffs

Tarriff Jumping

East India Company Leader

Robert Clive

Prices for the same commodity in different markets approaching each other; a sign of economic globalization

Commodity Price Convergene

Secreary of State, Truman Administration (1947-1949)

George C. Marshall

refers to the post-Civil War and post-Reconstruction era, from the 1870s to the 1890s, which saw unprecedented economic, industrial, and population expansion. The era overlaps with Reconstruction (which ended in 1877) and includes the Panic of 1873

Gilded Age

The relationship between the prices of imports and exports. The trend in this century has been for cheap primary products and expensive manufactured goods, and—with the exception of oil—most raw material prices fell very sharply from the mid-1980s. This has happened because large companies from the rich, industrialized nations can dominate and structure internal markets in a way that is denied to small, unorganized Third World commodity producers. This change has acted adversely on developing countries; for example, African terms of trade deteriorated by over 30% between 1980 and 1989. It has led to policies of industrialization, aimed at import substitution, in the Third World, and to attempts to reduce production in order to increase prices

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